General Motors (GM) sales increased by one percent in June, despite ongoing recalls of defective car models related to faulty ignition switches.
GM is currently in the process of recalling at least 25.7 million vehicles due to the reported problems with the ignition switch. The defect has been linked to at least 13 deaths. Some industry experts forecasted that the car manufacturer's sales would go down and it would be coldly-received in the showroom, but June's sales report proved the opposite.
Autodata Corp. found that GM's market share in the United States increased by 1.9 percent in June compared to the sales recorded in January before the recalls began, Businessweek reported.
Automobile sale site Edmunds.com explained the increasing number of people who owned older models created a strong market for GM dealerships. In June, GM surprisingly earned a one percent increase in their sales, defying the 6.3 percent decline predicted by analysts.
The company attributed the sales increase to its new sports-utility vehicle models. For starters, the Cadillac Escalade's sales increased to 84 percent, while the GMC Yukon jumped up 50 percent and the Chevy Suburban, to 73 percent.
Although the company is pleased with the good business this season, officials still must face a host of issues the recalls have created.
"We still believe the biggest potential effect of the ignition switch problems and expanding recalls could be to GM's reputation, reducing the company's market share or pricing power," Standard & Poor's Ratings Services said yesterday in a statement, as quoted by Businessweek.
The sales increase is also good news for investors who remained positive despite the crisis. In April, the issue resulted in a $3 billion-drop of shareholders' value in just about a month. The investors were reportedly satisfied with the fact that the company worked hard to address the issue.
GM recently offered to compensate victims of accidents caused by the faulty ignition switch.
